Net revenues at Levi Strauss grew 6 percent on a reported basis and 7
percent excluding 11 million dollars in unfavourable currency translation
effects to 1,068 million dollars, for the second quarter ended May 28,
2017. Net income, Levi Strauss said, however, declined 13 million dollars
primarily due to a 23 million dollars loss on early extinguishment of debt.
Adjusted EBIT grew 7 percent reflecting higher revenue and gross
margins.

"Our strong year-to-date revenue growth reinforces the benefits of a
more balanced portfolio as our women’s, tops, direct-to-consumer and
international businesses delivered solid results, despite a slight decline
in the US wholesale business. Based on the performance in the first half,
we are raising revenue growth guidance for the full year,” said Chip Bergh,
President and CEO, Levi Strauss & Co. in a media statement.

Second quarter financial highlights

The company said, direct-to-consumer revenues grew 13 percent on
performance and expansion of the retail network, as well as ecommerce
growth. Wholesale revenues grew 2 percent reflecting growth in Europe.

On a reported basis, gross margin for the second quarter was 52.3
percent of revenues compared with 51.1 percent in the same quarter of
fiscal 2016, reflecting the margin benefit from revenue growth in the
direct-to-consumer channel and international business. The company had 61
more company-operated stores at the end of the second quarter of 2017 than
it did at the end of the second quarter of 2016. Operating income grew 8
percent and operating margin was approximately flat year-over-year.

In the Americas, excluding unfavourable currency effects of 3 million
dollars, net revenues grew 3 percent, which the company attributed to
higher direct-to-consumer revenues in the US and higher revenues in Canada
and Mexico, partially offset by a decline in US wholesale as lower Dockers
revenue offset growth in Levi's, Signature and Denizen brands.